Auto Loan Delinquencies Surge 18% Among Young Americans

Jon

Auto loan delinquency rates jumped nearly 13% in the last year, according to a new report by Transunion, with young (under-30) Americans seeing a 17.8% surge in 60 day delinquency rates, as auto loan debt rose for the 14th straight quarter to $17,352. While these are notable rises, the overall levels remain low for now, but subprime-loan-delinquencies rose notably to 5.31%. However, in a somewhat stunningly blinkered conclusion, Transunion’s Peter Terek notes “the uptick in delinquency reflects a healthy and thriving auto finance industry where credit is more broadly available to all consumers.”

This post was published at Zero Hedge on 11/24/2014.

China…Follow The Money!

Jon

On morning of 17 November, while Western investors were sleeping, China opened the door to its investment world. On that day China began two way trading between the Shanghai and Hong Kong stock exchanges. This development essentially opened the Chinese stock market to investors around the world through Shanghai-Hong Kong Stock Connect. They said to investors around the world, ‘Welcome, just bring your money and come right in.’
Investors would be well advised to be aware of the money flowing into the Chinese stock market, and possible ramifications of that money movement. Money is like water flowing across the earth, it fills in the low spot. To foreign investors, and in particular dollar-based institutional funds, the Chinese stock market is a ‘low spot’ to be filled in with money. Foreign investors will fill that ‘low spot’ with their money. Institutional money managers cannot ignore the most important economy in the world, and one destined to be the largest. As the chart at right portrays, the cumulative dollar flow into China’s stock market is off to a good start. At present the daily limitation on investment money inflow is 13 billion Yuan, or roughly $2.1 billion, per day. Actual money flows have been below that limit, but it is just the first week of the rest of time. Note especially that we only have a week of data, and the discussion that follows is about trends that will unfold over time.

This post was published at Gold-Eagle on November 24, 2014.

Here Are The Most Popular “Hedge Fund” Stocks in The Third Quarter

Jon

As observed last week, 2014 will be the sixth (and record) consecutive year in a row in which the hedge fund community will generate lower returns than the S&P. Worse, as of November 19, the average hedge fund was down year to date, which explains why as Reuters reported last week, there has been a deluge of redemption requests into the 2 and 20 space, assuring that this bonus season may be great for M&A bankers, but it certainly will be a disappointment to the lofty remuneration expectations of the vast bulk of hedge fund workers.
Furthermore, as we also showed, in the new normal, in which the market’s Chief Risk Officer(s) are all economist graduates of either Princeton or MIT, and congregate at the BIS HQ in Basel every few months to plot the future of the world’s centrally-planned economy, the best strategy has been to do the oppositeof what hedge funds have done: something we first observed over two years ago, as the most shorted companies have outperformed the vast majority if not all traditional strategies year after year.
And yet, just like the lunacy of believing that central banks are “fixing things”, when the current global economic situation is getting worse by the day precisely due to central bank policies, there are those pattern-chasing momos, who still find delight in copycatting whatever it is that the if not smartest, then best paid men, in the room do. For their benefit, here via Goldman, is the most recent, Q3, summary of the most popular stocks within the hedge fund community.

This post was published at Zero Hedge on 11/24/2014.

Why Gold Is Headed Much Higher

Jon

What really drives the price of gold? Some say it’s a fear gauge. Others prefer to look at the demand coming from the Indian wedding season. But the silliest of all conclusions to reach is that the dollar price of gold should be determined solely by its value vis- -vis another fiat currency.
The truth is the primary driver of gold is the intrinsic value of the dollar itself, not its value on the Dollar Index (DXY). The intrinsic value of the dollar can be determined by the level of real interest rates. Real interest rates are calculated by subtracting the rate of inflation from a country’s “risk free” sovereign yield. Right now the level of real interest rates in the U. S. is a negative 1.55%.
A key factor is to then determine the future direction of real interest rates. The more positive real rates become, the less incentivized investors are to hold gold. And the opposite is also true. The more negative real rates become, the more necessary it is to own an asset that is proven to keep pace with inflation. The Fed has threatened to begin lift off from its zero interest rate policy in the middle of next year. However, the Fed has made it clear that it will only raise nominal yields if inflation is rising as well. Therefore, there is no reason to believe real interest rates will rise anytime in the near future.

This post was published at Gold-Eagle on November 24, 2014.

Gold & EUR Drop After ECB’s Coeure Counters Weidmann’s Warnings

Jon

More of the same blather from Europe as following Weidmann’s earlier comments with regard the high-hurdles that the ECB still faces over sovereign QE, Coeure has come out to counter that by noting that the ECB does not have to see deflation to act and that they want to have a discussion of asset-purchases next week. EUR faded the Weidmann gains and Gold and silver are sliding as USD strengthens.
First Weidmann…
The head of Germany’s Bundesbank cautioned the European Central Bank on Monday about the legal hurdles it would face in embarking on money printing to buy government bonds, underlining its opposition to such a move.

This post was published at Zero Hedge on 11/24/2014.

November Delivery; A Comex Odyssey

Jon

By now, we all know that the process of Comex metal delivery is shady and deliberately opaque. What has transpired these past few weeks only strengthens this belief.
I’ve written several times in the past about the perfect and precise additions to, and subtractions from, the JPM eligible gold vault. The most recent post included all of the past links and can be found here: However, that’s not what I’m writing about today. Instead, I want to focus upon the Comex gold vaults and apparent surge/rush for immediately deliverable gold.
Remember how this works…There are six months per year that are considered “delivery” months for Comex gold. Though an entity may stand for delivery of any contract, the vast majority of the deliveries are made in February, April, June, August, October (to a lesser extent) and December (typically the busiest delivery month of the year). You can see this on the chart below:

This post was published at TF Metals Report on November 24, 2014.

Total Chinese Gold Reserves Nearly 16,000t

Jon

Chinese gold demand remains very strong throughout week 46 (November 10 – 14), withdrawals from the vaults of the Shanghai Gold Exchange (SGE) accounted for 52 tonnes. The year to date counter has reached 1,761 tonnes.
Below you can see a screen shot of the Chinese weekly SGE report disclosing total withdrawals.

Since we have confirmation from the SGE about the exact rules for Chinese domestic banks on importing gold through the Shanghai International Gold Exchange (SGEI), we know for sure trading volume on the SGEI can distort Chinese wholesale gold demand measured by SGE withdrawals (which also include SGEI withdrawals).
Given the fact total SGE withdrawals are very strong tells us the Chinese are buying massive amounts of gold, of which most is imported. In contrast SGEI trading volumes are quite low, which suggests domestic banks do not import through the SGEI (I only heard from one domestic bank having imported 500 Kg through the SGEI).
Consequently I think SGEI trading is primarily done by foreigners in the Shanghai Free Trade Zone. All this volume is concentrated in the iAu9999 physical gold contract. Because this is a physical contract (100 % margin), and because of the low volumes, SGEI trading is not likely to be speculation, but simple physical buying. If these foreigners that buy physical also withdrawal the gold to ship it home or leave it in the SGEI vaults we don’t know.

This post was published at Bullion Star on 24 Nov 2014.

Service PMI Misses, Tumbles To 7-Month Lows, “Extreme Weather” Warning For GDP Issued

Jon

On the heels of the biggest miss on record for US Manufacturing PMI (which corresponded un-decoupling-ly with disappointing European and Chinese Manufacturing PMIs), Markit’s Services PMI printed 56.3, missing 57.3 expectations and notably down from October’s 57.1 to 7 month lows. As Markit notes, the index has now pointed to softer growth of business activity in each of the past five months, to signal a sustained loss of momentum since the post-crisis peak seen in June. What is even more worrying… Markit points out that the economic upturn has lost considerable momentum, and with extreme weather hitting parts of the country, growth could slow even further.
Services PMI ugly…

This post was published at Zero Hedge on 11/24/2014.

Ukraine Central Bank Admits Gold Outflow, Calls It “Optimization Of Reserve Structure”

Jon

A week after we reported that the head of the Ukraine central bank admitted in an unofficial, informal interview that Ukraine’s gold is gone, all gone, moments ago the Central Bank revealed that, sure enough, the gold holdings in the civil war-torn country have tumbled, as a result of a decision in September to “increase the share of US dollars in a reserve basket”, or in other words, to sell the gold. Just don’t call it that: in fact, as of today we have a brand new buzzword for gold liquidations: “optimization of international reserves.”

This post was published at Zero Hedge on 11/24/2014.

What causes the moves in the U.S. dollar?

Jon

Understanding the relationship between the U. S. dollar and gold is necessary to successfully invest in gold. However, it is not sufficient, because changes in the USD exchange rates cannot be analyzed outside the economic context: gold, although not officially money, is traded like a currency. Therefore, long-term investors should not analyze the gold market in isolation or confine themselves to observe the U. S. dollar index. The price of gold reflects the complex financial world and hence depends on many factors: the movements of interest rates, inflation or economic growth. The U. S. dollar may rise due to many factors, each time affecting the price of gold in a slightly different way. In other words, if the USD and gold prices have an inverse relationship, then forecasts for gold prices should be prepared while taking into account the expectations of currency movement. To do this, we need to understand the factors driving the greenback.
The financial press presents many explanations for U. S. dollar movements. Some analysts argue that changes in the balance of trade are responsible for strengths or weaknesses of the currency. However, balance of payments is only an accounting difference between the monetary value of what was sold versus the monetary value of what was bought, and thus cannot alter the external purchasing power of money. Other economists say that exchange rates depend upon economic health. However, the causality runs in the opposite direction. The strong currency is the condition of economic growth. Just consider the long-term relative position of the U. S. dollar. Generally, the greenback has been losing value compared to other major currencies (Japanese yen, Swiss franc and German mark or Euro now) since the 1970s, i.e. breaking the link with gold. However, two important exceptions occurred in the first half of 1980s and in the second half of 1990s.

This post was published at GoldSeek on 24 November 2014.

Dallas Fed Unchanged in November, Despite 11 Of 15 Components Declining

Jon

Of the 15 sub-indices under the Dallas Fed Manufacturing survey, only 4 improved in November with New orders tumbling, and wages, number of employees, and average workweek all sliding notably. So, with that in mind, thanks to a surge in ‘hope’-based business activity outlook 6 months forward (from 13.3 to 18.3), the Dallas Fed printed 10.5 (against expectations of 9.0) and unchanged from October’s 10.5. The number of employees shrank to its lowest in 6 months.
Dallas Fed headline UNCH…

This post was published at Zero Hedge on 11/24/2014.

Why the Plunge Protection Team Loves Fridays

Jon

The Plunge Protection Team has been hard at work lately, although not in the way some traders might imagine. The very name evokes the shadowy activities of a group of Svengalis believed to control the stock market through timely interventions in such key trading vehicles as the S&P 500 futures. In fact, the PPT, more blandly known as the President’s Working Group on Financial Markets, was commissioned under President Reagan after the 1987 Crash to prevent meltdowns. These day, however, nearly six years into a ferocious bull market that seldom pauses for breath, one might question why a Plunge Protection Team is needed at all. The answer is that the PPT, far from defending against selling panics, has been furtively on the offensive, triggering short-squeeze panics that spike shares to new record highs at every opportunity. Usually, the news catalyzing these rallies hits the tickertape on a Friday, when the effects of a short-covering binge are apt to be most effective. It is hardly a stretch to imagine that these engineered events have been scheduled and coordinated by the PPT, working in concert with the central banks.

This post was published at Rick Ackerman on NOVEMBER 24, 2014.

Swiss bank chief wants cartel to continue

Jon

The head of the SNB reiterated concerns that a popular vote on requiring the central bank to keep a fifth of its assets in gold would hinder its ability to conduct monetary policy.
In text of a speech to be delivered Sunday, SNB Chairman Thomas Jordan said the initiative, known as ‘Save Our Swiss Gold,’ would limit the central bank’s ‘room for maneuver.’ for that read, manipulate markets to suit. That it would make it harder for the bank to intervene(manipulate) during crises and fulfill its mandate of price(manipulation) stability.
‘The initiative is both unnecessary and dangerous,’ Mr. Jordan said in the speech. ‘It is unnecessary because, under the current monetary order, there is no link between price stability and the share of gold in the SNB balance sheet.’
On Nov. 30, the Swiss will vote on whether the SNB should be required to maintain a minimum of 20% of its assets in gold. If passed, the initiative would also prevent the SNB from selling gold and force it to repatriate its holdings of the precious metal maintained in the U. K. and Canada.

This post was published at TruthinGold on November 24, 2014.

The Mystery Of America’s “Schrodinger” Middle Class, Which Is Either Thriving Or About To Go Extinct

Jon

On one hand, the US middle class has rarely if ever had it worse. At least, if one actually dares to venture into this thing called the real world, and/or believes the NYT’s report: “Falling Wages at Factories Squeeze the Middle Class.” Some excerpts:
For nearly 20 years, Darrell Eberhardt worked in an Ohio factory putting together wheelchairs, earning $18.50 an hour, enough to gain a toehold in the middle class and feel respected at work. He is still working with his hands, assembling seats for Chevrolet Cruze cars at the Camaco auto parts factory in Lorain, Ohio, but now he makes $10.50 an hour and is barely hanging on. ‘I’d like to earn more,’ said Mr. Eberhardt, who is 49 and went back to school a few years ago to earn an associate’s degree. ‘But the chances of finding something like I used to have are slim to none.’
Even as the White House and leaders on Capitol Hill and in Fortune 500 boardrooms all agree that expanding the country’s manufacturing base is a key to prosperity, evidence is growing that the pay of many blue-collar jobs is shrinking to the point where they can no longer support a middle-class life.

This post was published at Zero Hedge on 11/24/2014.

Economic goals of young and old pulling in diverging directions: times will only get tougher for young Americans.

Jon

Older Americans tend to vote in larger numbers and are more interested in politics than younger Americans. In the past the older voting cohort was not as large so politicians were cautious about deviating too far for one group alone. Today, we are having a large number of older Americans living longer into old age. Social Security has become the default retirement plan for many older Americans. It should come as no surprise that priorities of the young and the old diverge dramatically. Younger Americans are interested in education while older Americans are interested in Social Security and military defense. Yet each group needs each other to accomplish their goals. The young fight wars and Social Security is paid out via current payroll taxes. Education requires teachers and those willing to enlighten future generations. Unfortunately people vote myopically and in many cases, setup systems that are detrimental to their own children.
America is getting older
By 2020 we will have over 54 million Americans 65 years of age or older. This is a very large percentage of the population. At the same time, the system will be relying on fewer younger workers for each old retiree on Social Security. This will simply add additional strain to the system.
First, take a look at the aging of the country:

This post was published at MyBudget360 on November 24, 2014.

122 Tonnes of Gold Secretly Repatriated to Netherlands

Jon

The Dutch central bank said Friday it is repatriating some of its gold reserves from the U. S., making it the latest central bank in Europe to address public concerns about the safety of its gold in the wake of the eurozone debt crisis.
As the debate regarding whether or not Switzerland should keep the bulk of its gold reserves at home on Swiss soil reaches it’s climax – the referendum takes place on Sunday – it is telling that the Dutch announced on Friday that they have just secretly repatriated 122 tonnes of their sovereign gold reserves from New York back to Amsterdam.
The gold, worth $5 billion at today’s prices, represents 20% of the Netherlands total reserves. It now keeps 31% of its reserves in Amsterdam. Another 31% is believed to be in New York, with the remainder spread between Ottawa and London – the same locations where the bulk of Swiss gold is purported to be stored.

This post was published at Gold Core on 24 November 2014.

The Answer to this Question Will Change Silver Forever

Jon

First of all, my brothers, I wanted to let you know that things will all soon be fixed in the contractual, derivative silver and gold markets! You heard me correctly, things will be made ‘right as rain’, and all those responsible for helping the fraud and rigging within these markets will be brought to justice! Wanna know why? Well, look no further than this latest announcement by the CFTC!
Washington, DC – The U. S. Commodity Futures Trading Commission (CFTC) today launched CFTC SmartCheck, a new national campaign to help investors identify and protect themselves against financial fraud. The comprehensive campaign includes a new website, a national advertising campaign and interactive videos that will help investors spot investment offers that are potentially fraudulent. The new website, SmartCheck. CFTC.gov, unveiled today, is an educational tool that helps investors conduct background checks of financial professionals.
Yes, the CFTC has redoubled their efforts to protect us all from financial fraud, God bless them! Why, they’ve even made a brand new website to help check the backgrounds of financial professionals! You see, this is crucial, because once the investing public uses this new ‘SmartCheck’ system on each member of the CFTC itself, they will discover that this organization has protected massive cons and market rigging in the commodity and precious metals spaces, by the largest investment and bullion banks on earth! Once citizens realize it, they will demand multiple arrests within the CFTC, and that law-makers shut down this shell organization for good!
Whew, and not a moment too soon, either! About time someone made this exceptionally helpful tool available to the investing public! Finally, justice for every regulator who has colluded with the banks, starting with the inventors of SmartCheck itself!
Onto the Matter at Hand
Ahh, ok, that’s enough Holiday humor! Ya know, sometimes ya gotta laugh to keep from weeping, as they say. In this case though, I suspect some of you may have laughed so hard that you did weep!
Recently, I took some time to highlight the silver investment demand numbers in India, because the figures we’re seeing there have staggering implications for every stacker. I’ve been watching India like a hawk because, believe it or not, their attitude toward silver is what largely holds the immediate present for precious metals in its hands.

This post was published at The Wealth Watchman on NOVEMBER 24, 2014.

Gregory Mannarino-Deflation First then Massive Inflation

Jon

The following video was published by Greg Hunter on Nov 23, 2014
On timing of the dollar’s demise, Gregory Mannarino of TradersChoice.net says, ‘Money velocity is the speed money moves through the system. Once we begin to see the money velocity start to pick up, we’re going to have the $3.3 plus trillion, which the Federal Reserve has printed out of thin air since the crash of 2008. All those extra bills are going to start chasing the same amount of goods. You do not need to be a rocket scientist to figure out how this is going to play out. In my book, ‘The Politics of Money,’ I say in the end stage, we would see deflation first and then massive inflation, and that plays exactly into what’s going on right now. . . . The U. S. dollar is on borrowed time, and I think there is going to be a terrible price to pay. . . . Watch for hyperinflation because it is a very real possibility.’